Episode 5: The Mule

Pushkin.

A few months ago, I asked my executive producer to download a bunch of online sports betting apps and open up accounts with them, partly because I live in California, where sports betting isn't yet legal, and Lydia Jane Kott, my producer, lives in New York, where it is legal, and partly because well, I just thought it would be kind of fun to see what would happen when you thrust someone like LJ into the sports gambling jungle, someone with exactly zero interest in sports and even less interest

So you know, once I log in, I see on my screen it's honestly a really overwhelming view of things. It's all blue, it says fandual sports book, and there's a ton of different options.

So there's NFL, MLB.

Let's take an example. Let's click on NC double a football.

There's banners everywhere that are like, refer a friend, give fifty dollars, get fifty dollars, and then if you scroll down, it has different bets that you can do so, it says, for instance.

College football odds.

And then there's a list of NC DOUBLEA football games, and then it allows you to bet on different games and in different ways.

Do you find yourself being nudged in any direction by the app? Does the way the information is presented to you lead you to some action?

Yeah?

Yeah?

So like if I were to just open it and have no plan, it says like popular same game parlay bets is what I'm being nudged to do.

Or bet on the Battle of the Birds on Monday in a.

Football It's a kind of mission to enter this new world and look around without spooking the natives.

LJ is perfect for it.

I've sent her to interview people who should be extremely wary of any journalists. They're basically never wary of her. They just hander everything she asks for and more. Do you know who's playing?

I guess the atl Falcons and Philadelphia Eagles.

So I'm being nudged to bet on on that.

Do you know who? Where the atl Falcons are based?

Atlanta? Okay, you're trying to send me I do know. I do know my state abbreviations.

Atlanta's not a state.

Okay, that's Okay, that's a low blow.

My god, that's a bridge too far.

We can make fun of my lack of sports knowledge, we cannot just go into make fun of Liniogude for everything on this podcast.

Before she'd even placed a single bet, FanDuel and DraftKings and all the lesser apps were spamming her so incessantly that her Gmail account became unusable. All these people she didn't know wanted her to begin her new life as a sports gambler as soon as possible, and they're so helpful, so kind, so relentless with their special offers. But LJ has been coy reluctant waiting for her jungle guide. Which books do you have set up? LJ?

I have Fandol, DraftKings and.

Fliff Rufus Peabody sports Gambler, whom we met last episode in Las Vegas.

Do you have not like Bette Rivers or whatever I mean?

I think at whatever?

What are the other.

Ones in New York?

Bet MGM, Get bet MGM.

Okay, they'll limit us very quickly, but they will be very easy to win out first.

Okay, great, Okay, I'll download bet.

And Jim Rufus has a problem. Both FanDuel and DraftKings heavily limit the amount he could bet because Rufus actually knows what he's doing, and Rufus's bets tend to win. So Rufus will be the brains and most of the money.

LJ will be well.

Her role has had many names, runner, mover, betting partner, also mule.

I like mule mule.

Sort of creates a picture in your head. Rufus loads the backs of his mules with cash and wax them on their fannies, and they saw her off into the marketplace and then returned to him, weighted down with even more cash. And how much do you imagine you'd be wiring to her?

So I would say.

I'd probably be wiring her maybe fifty grand, or send me fifty grand her way.

So I don't want to be greedy, and I don't want to be foolish, okay, but I think it is a fun idea for me to have a little piece of it.

So Michael, you want downside, yeah, okay, Cotly So LJ is the best deal, but she also well at the end of this, probably won't be able to bet her in her own name for very much money, more than maybe seventeen dollars for.

The rest of her life. So that's the cost here.

I'm willing that's it. Yeah, I'm okay with that.

Okay, Ziel, I'll be a simple investor. I'll win or lose with Rufus. LJ will have big upside and a tiny bit of money at stay. Mostly, she'll be putting her reputation as a sports gambler at risk. By the time we're done, no sports bookie will ever take any real action from her ever again, or so says Rufus.

How long do you think we're going to last?

I really don't know. This will be interesting to see.

But if we last forever and they just make like a lot of money, that would be the best case scenario.

Yes it would.

But the truth is, we just want to see how this market works. I'm Michael Lewis, and this is against the rules. We're all about characters and situations here this season. The fan is our character and sports gambling is our situation. Back when sports gambling was against the law, it was fairly easy to play sports bets. I know that sounds odd, but if you ask any serious gambler that tell you the challenge wasn't getting your bets down.

It was finding smart bets to make. Now sports gambling is legal.

In thirty eight states, and very weirdly, it's easier to find smart bets than to actually place those bets, because the new system doesn't want to maximize the number of sports bets that Americans make. It wants to maximize their stupid bets. The bets, as they say, with negative expected value, the bets that if you make enough of them, you're certain eventually to lose, and so any smart sports gambler

The relationship can become pretty impersonal. To Rufus. These mules are.

Just names on a spreadsheet, a PayPal address on his phone. Some he's never met. Most of the bet sports on their own, usually badly. A few even think they know almost as much as Rufus, which is never a good sign. So LJ will be a different kind of mule for a start. She'll need a lot more breaking in than most.

Okay, let's open the FanDuel app and kind of look at the navigation there.

Their first sit down is just a dry run.

The FanDuel app can be harder to navigate. It's considered the best app. There's like live scoring on it. I mean, I guess there is a fan tool as well.

And then I have ten dollars.

You have ten dollars. Amazing. LJ has ten dollars in her account. Rufus fixes that issue with a few clicks. He moves a few thousand more dollars into Lj's bank account.

It's crazy how quickly you can like disassociate from like what these numbers, Oh yeah, their.

Numbers in a spreadsheet.

That's basically all it is.

Rufus wants to start by checking out the lines on Adam Scott. LJ has never heard of Adam Scott.

He's a golfer.

Okay, So Adam Scott will win the tournament.

Adam Scott tournament winner plus one seventy five.

Oh wow, So I say we bet that. But let's see we know how much we can bet it for.

Okay, So I'm in the right place, right.

I'm going to click on this, click on the plus one seventy five worst case scenario where we're priming the account.

Here, priming the account. It's what Rufus calls it when he intentionally places dumb bets. He usually does this with his new mules. It makes the gambling companies even more eager to take his future bets. Lose a bit upfront to win much more later.

And let's see it, says ad stakes. So what if we tried it, we put it? How much did we deposit?

Five thousand?

Yeah?

What if we tried to put it for three thousand dollars? We'll see if they take it? Can we do that?

You?

Okay with that?

Yeah?

I mean it's not I don't know, I.

It's not my truck.

What did they say?

They said, oh, well, they'll give you two thousand, two hundred and twenty five dollars and fifty eight cents.

Yeah, go for it. Processing.

But okay, my bet has been sected.

Good luck done. That's how we do it.

And then when do we know, Well, well, no, on Sunday, I thought bet one. We'll have many more bets before then.

All of this is currently legal.

By the way, Rufus can still partner up with other gamblers, but it's massively irritating to the gambling companies who treat Rufus as a kind of cheater, a card counter at the blackjack table.

But I don't think of him that way.

He's actually figured out stuff about sports, about why things happen in sports that other people don't know. He's more like a smart stock market investor. He knows better than the market knows the right price for some bet. What kind of market refuses to let the smartest people in this market?

As it turns out, and so here we are. LJ is actually useful to Rufus.

It's mostly trust is kind of one of the biggest things.

That's Tom Peabody, Rufus's younger brother, who runs the mule team and so spends lots of time looking for new mules to replace the ones who've been worn out.

It's like wife, girlfriend, mother, like we've gone through my mom and dad's accounts, but generally friends and family, and then when you get past that, it's kind of other people that you.

Trust, people like LJ, who, as I say, is a bit different as mules go. Because we asked Rufus and Town to supply her with nothing but smart bets, and that's not what they would normally do.

If LJ were starting for us and we wanted to keep that account, we would probably bet ten to twenty bets right at post on NFL, college football, tennis, anything. We're happy to lose money in the short term to have some more account longevity.

That's actually not how LJ plans to roll. She's going to just place these smart bets and see how the bookies respond. Her first was that two grand or so on Adam Scott. Adam Scott for Bertie at eighteen flew out of the flag. Adam Scott loses, and we're a couple of thousand dollars poorer. But our experiment is on, Hey, so tell me what's happened what's going on?

Okay, So when I was in Rufus's apartment, I'll find great time. What I found difficult is then I left Rufus's apartment. I came back to the office and I was by myself, and it's like.

Literally gibberish. He just texted me gibberish.

Read it to me.

Sung JM Top ten plus one ninety. This is in the top finished heading. Also Sung JM ties pay in full plus one sixty.

Those are DraftKings. Also same bet SUNGJYM top ten plus one ninety at FanDuel, sorry about to take off.

Turns out Rufus is doing all this from a plane. He just wired her these tens of thousands of dollars to use to bet. Now he's up in the sky somewhere completely out of touch.

Sungday, I am top five ties pay in full plus five fifty DraftKings. Sunday I am top five under top finished heading plus seven hundred DraftKings. Sunday I'm top five plus seven hundred FanDuel.

So I don't even know what sport this is. Is this golf?

I think it's golf.

Yeah, before I believe it's golf.

Do you have any interesting golf.

No, I've never watched golf.

Do you know how many holes there are?

Nine?

Okay? Uh, actually eighteen, but that's okay.

I thought I got that right.

You can kind of see why I thought she'd be perfect, right. She's impossible to suspect of anything, a kind of baby faced assassin, the Steph Curry of podcasting, the bullet you never see coming until it's too late. But she does need to learn how to press the right buttons on her gambling app.

Like after we get off the phone, I'm going to be placing one, two, three, four, five, six seven bets. And the fun thing about it also is that I don't understand at all what they are as of now. I'll probably be placing like ten another ten thousand dollars after we get off the phone, and I'll be sweating.

One bet takes me about half an hour. It's genuinely really scary, Like I feel like I hYP prevent, like I get my I get really scared. I hypreventally. I peace around for a little bit and pretend I haven't seen it, don't.

You aren't you kind of in a hurry to get the best down in case the line.

Moves So I talked about this with Rufus like a lot, and he said that I'll always have at least a few hours.

Actually, Rufus has told her she had a few minutes to get the bets down, but never mind.

I always cried this morning because I was like, did I just lose five thousand dollars?

And I realized I had just done the accounting one.

I could not be worse for the stob. Yeah, the perfect Ye're the perfect mule. They're gonna They're gonna call you up to see if you were actually a sharp and they're gonna talk to you for like six seconds ago. There's no way she knows anything. I'm about to realize my first mistake. I sort of imagine that if the gambling companies got suspicious about Lj's bets, some human from DraftKings or fan Duel would call her up. Then LJ would do what LJ does and lull them to sleep.

You basically want to find a way to portray yourself as close to being a problem gambler as possible. You know, I've been everything from an incredibly rich, entitled trust fund guy to a sort of a maniac commenting on every point scored in every basketball came, bemoaning his losses in the morning and begging for a redeposit as well.

That's Beckett. It's not his real name.

He uses his real name to make his bets, and so he doesn't want anyone to know it. We're also disguising his voice, and we promise to say nothing about him except that he's been a highly successful sports gambler almost as long as Rufe's Peabody. But Beckett's got a slightly different angle than Rufus. Rufus has been limited on the apps, so he gets other people to place his bets. Beckett becomes other people in order to place his own bets on the apps.

You know, they're classified as recreational butt makers. They're not sitting there trying to figure out what the optimal line should be for each game. They're basically marketing and technology companies which happen to be in the business of gambling, and their strategy is to find players who they believe will not beat the house edge and then just get them to play as much as possible. So what they end up doing is something called steak factoring.

Steak factoring is the apps figuring out just how smart you are and assigning limits. These limits change is the algoes watch.

What you do.

Once they realize that you are competent, they might give you a steak factor of ten percent, and they might say, okay, you are only allowed to bet five hundred dollars. Once they realize or believe you are incompetent, they might give you a steak factor of up to ten times the amount, so you might be able to bet fifty thousand dollars on something, but a new customer might only be able to bet five thousand on, and that a professional might

And apart from raising limits on the incompetent, what else might they do to encourage the incompetent to practice their incompetency.

I would perhaps a sign of the IP host to that person, and that host would offer them as soon as of inducements to continue betting, to continue depositing, to continue playing.

Beckett's goal is to get those inducements and to get those really high limits, to get past the velvet ropes, to get himself into the same rooms with the dumb betters. Well, give me examples of how a professional gambler or an edge player would induce one of these companies to invite you into the vipre room and up your limits.

Essentially, you would be creating bets that you know the sportsbook wants to see, and he would do them a volume that is high enough that you grab their attention and you get contacted and then bunce you're in the inside, you know good things happen.

But once you're on the inside, wouldn't they spot that your behavior changed? You don't want to continue to play stupid bets, So how long or do they do? They tag you as dumb and then don't pay attention for a while.

You know, it's a fine line. Some people are not very nuanced at it, and we'll expose themselves very quickly. But in general, you have quite a lot of leeway once you're in those programs, and you know there are things that you can do to not make your behavior as an advantage plan as obvious.

Once you're in the VIP programs, you get to meet actual human beings. At the gambling companies, they invite you to the next game, They tempt you with special offers to bet. Sometimes they even give you money to bet, like actually let you make bets for free. In theory, these new companies are required to flag people with gambling problems and limit them, guide them to shrinks who can help them, and end the cycle of misery caused by gambling addiction. In practice, it seems not so much.

I was developing my character as a very frustrated, losing gambler who keep throwing money in. One day, I sent this host a flurry of messages after some really heavy losses, you know, over the previous few days. I sent message off the message and the host called me absolutely exasperated and said, hey, man, look, look, I know you're really frustrated. I'm sorry you lost. Don't worry. I'm going to take care of you. But please please do not put messages

It's unbelievable, it's disgusting.

It's absolutely disgusting.

How important to those companies?

Do you think the ATTIC is incredibly important? I should say that we've reached out to the mad Sports betting companies Fan Duel and DraftKings for comment on this alleged practice, and they've declined our requests or just haven't responded. But it seems clear from talking with betters themselves that in this world, the problem gambler isn't the guy using his life savings to chase his losses. The problem gambler is a person like Beckett and Rufus and maybe even LJ.

I believe I'm down.

LJ was maybe not the perfect mule. I was learning that, but I thought that at least she might be a happy mule. She's not a happy mule. She's a mule that every time Rufus tries to spur to action, keeps circling back towards the barn.

At one point, Rufus said, we were up, and I believe we're down.

I'm not.

But I got sent in an Excel spreadsheet that I'm supposed to start filling out, which I think will help because I think my accounting system that I made up seems to be flawed.

Do you have any sense of how much more he's betting on these same golfers elsewhere at the same time.

No idea.

I mean, he did show me like a huge spreadsheet of like he has.

I think he has.

Currently thirty mules, and it kind of seems like he has like a dashboard of how up everyone is overall, and I think it's like five million, but I don't know what other people are doing.

Do you have a sense that he's pleased with you as a mule.

No, I don't think he could possibly be released with me as a mule, which is partly why this feel so bad.

A wondreless customer you are.

And then she went dark on a perfectly beautiful weekend, a day when she could have been laying tens of thousands of dollars on professional golf. She just up and went to the beach, spent hours without so much as glancing at her phone. And I think, Lja, the rule is that mules really don't go to the beach. You've got to be available when they are ready to bed, poor LJ. It's just if you want to be an eagle, if you want to fly, you don't go to the beach.

You got to be there. We tend to make a bed.

We can be we can be better about uh about some advanced notice too. We can give LJ a couple of beach hours here and there.

Turm Peabody again Rufus's brother Mule Runner.

Yet I don't know how smart it is for Rufus to send her essentially a page full of Greek instructions and then get on a plane and say I'm not available for the next four hours, just to just do it.

I felt like like that was like a test.

It's like learning a different language.

Yeah, okay, I'm going to stop the recording.

She had a lot of things working against her, obviously, including her day job producing this podcast, But in spite of that, in just the first two days, she'd managed to get some bets down twenty thousand at least maybe thirty thousand dollars chicken feed to Rufe's Peabody, but kind of a shocking sum to a podcaster these days. Are you surprised he's been able to get the bets down that she's gotten down.

No, because in the beginning, they don't limit you super super quickly. They need to see enough where they're pretty confident that you're not going to lose that money back. Bigger events, they're more likely to think, okay, you're just sort of you're watching the big golf events.

Just four days after becoming a mule, LJ saw the first sign of trouble. She's placed the bets Rufus wanted to make with four different sports bookies, Fan Duel, DraftKings, bet Rivers, and bet MGM. Most of the bets have law lost, but she placed two bets of four thousand dollars each on golf at DraftKings and both of these bets won. Inside of her DraftKings account, eight thousand dollars

Okay, it is Tuesday, August twenty seventh, so I emailed DraftKings to get back in because there's no number that I can call. And I got a response this morning and it says there appears to have been a pattern of unusual activity on your account and as a result, we have placed temporary restrictions on your account as a precautionary safety measure. You will notice that although you can still log in, you may not be able to deposit

You heard that right.

Not only can she not bet, they're saying she might not be able to get the money out.

Please upload an image of you holding your current driver's license next to your face by clicking the upload now button below. We appreciate you helping us keep your account secure.

Roughly a nanosecond later, she got another email from some other part of DraftKings.

In order to remove the current restrictions on my account, I have to upload a self certified ID and also uploading my pay paul confirming ownership and showing transactions to DraftKings. That's from someone who is called a Draft King player advocate, which is cool.

I didn't know I had an advocate.

As it turns out, this is all just a day in the life of a mule. A few days later, fandueill follow DraftKings and cut lj's limits by eighty percent. They never say anything, They just stop taking all but the smallest bets, which sounds sad. But then LJ calls me and she sounds different. She sounds happy.

Okay, So here's what I am dying to tell you.

Okay, tell me.

This morning I woke up to a text message that says the following from a number that's not in my contacts.

Hi, Lydia, this is Courtney from BETMGM.

I wanted to reach out and introduce myself as your VIP account representative slash host.

I saw you had some great play.

Yes, great play at BETMGM. LJ had lost eight thousand dollars. That was the great play.

Congratulations.

Please let me know if you have any questions or if there's anything I can do to help out. So I didn't answer because I wasn't sure what to do, and then she texted, would love to get you out to one of our events as my guest if you are interested. We have Charlie XCX coming to MSG on the twenty third, and Megan Trainer at MSG as well. That's Madison Square Garden on the twenty fifth, which is like the concert of the Summer, Charlie at XCX. Would either of those be something you'd be interested in?

Well?

So yeah, are you?

Are you interesting?

Yes?

I'm interested?

So I said, you know, great, like, how's this work? Is it discounted? And she said the tickets are on me. They're my personal tickets and are bet MGM Suite at MSG both food and beverages are included for the.

Night as well.

And then Michael, I asked for a plus one.

And she said absolutely. Which concert do you want to go do?

And I asked for Charlie XCX and she said, she got me two tickets and she's she said, I'll actually be hosting that event as well, So I'm very excited to meet and be able to see you in person. The tickets will be sent to your email forty eight hours prior to the concert.

The Life of a Mule clearly it has its ups and downs.

LJ is now basically unwelcomed about large sums of money for the rest of her life.

The two sports books that.

Now control the new market DraftKings froze her account after she won eight thousand dollars. FanDuel saw something they didn't like and stopped taking her big bets, even though she was actually down five thousand bucks. But this market, this jungle, is obviously complicated, and this mule is not like other mules.

This mule is special. This mule is now a VIP.

Against the Rules is written and hosted by me Michael Lewis and produced by Lydia, Gene Coott, Catherine Gerdeau and Ariela Markowitz. Our editor is Julia Barton. Our engineer is Jake Korski. Our music was composed by Matthias Bossi and John Evans of stell Wagon Cinfinett. Our fact checker is Lauren Vespoli. Against the Rules is a production of Pushkin Industries.

I'm just gonna text my boyfriend that I can't come with him to take the dog out because I'm sports betting. I'm going to draft Kings. I'm choosing Davis Thompson two way minus one forty five, and I'm entering my wager amount for four thousand dollars and I'm gonna say place bet. I'm gonna be honest. I kind of find this to be a little scary. I'm gonna share that with reefus. Oh it got placed, I'll tell them it got placed.

Way did the race